For the last few weeks, we have been told a Republican plan to balance the budget was coming, one that would, almost miraculously, come up with more than $2 billion without raising taxes or cutting any public programs simply by transferring “surplus funds” that were “not doing anything” into the General Fund.

We knew and said that this plan was, at best, a one year fix that would not do anything to reduce the long term structural deficit in the state budget. And in the same piece we strongly suspected that it was based on some false assumptions about why there are numerous state special funds and why, at certain points of the year, they run a surplus.

But we were not prepared for what we heard today when the program was revealed and the whole effort was shown to be a sham of Wizard of Oz proportions.

On Thursday we released the 22nd edition of the State of Working Pennsylvania in which we review the current state of the economy with an eye towards changes in the standard of living for working families in the commonwealth. One of the new pieces of information we present in this year’s report, with the help of the crack staff at the Economic Policy Institute, is the median wage for full-time full-year workers in Pennsylvania since 1968.

Last November we elected a President who reminds many of us of a cranky uncle who sits at the far end of the Thanksgiving or Christmas table, muttering under his breath about the “damn government” and “wasted taxes” and, quite often, “those people who cause all the trouble.” When you try to engage him in discussion, you find that he has a ready – and extremely simplistic – answer to every question, one that is lacking in any detailed understanding of what government actually does and that assumes that “it’s very simple to do x or y” if not for conniving politicians.

Right now, some Republican members of the House of Representatives in Pennsylvania, with the support of outside advocates, are readying a plan to borrow massively, perhaps up to more than $2 billion, from many of the 100 or so special funds that, along with the General Fund, are part of the state budget. Their justification for doing so is that, at the end of each year, many of these funds have a surplus. So it seems easy enough to shift those surpluses – money they are quick to say is “just sitting there not doing anything” – into the General Fund.

The Commonwealth Foundation, in recent op-eds and website posts, has presented a misleading analysis of the state budget, one that falsely claims that state spending has been increasing relative to the states’ economy. The opposite is true. Between Fiscal Year 2001 and the current fiscal year, General Fund spending has shrunk from 4.74% of state GDP to 4.25% of state GDP.

One regular theme on this blog is that area-wide unions that lift wages and benefits in industries that cannot relocate are the main way we're going to fix our income distribution and — thanks to the political power of such area-wide unions once they represent tens of millions — fix our democracy.

It’s time for Speaker of the House Mike Turzai to come back from his fundraising trip and call the Pennsylvania House of Representatives together and belatedly finish the Pennsylvania budget. A bipartisan majority in the Senate has passed a bill to fund the budget. While it is not perfect, if Speaker Turzai will allow it to come to the floor for a vote, it appears a similar bipartisan majority can pass it in the House as well, preferably with some amendments to it’s most problematic features.

And, let there be no doubt, there are many problematic features in both the revenue package and the the companion bills passed by the Senate. But before we look at the problems, we should look at what has been achieved this year. The Republican leadership in the Senate has recognized something we have been saying all year: Pennsylvania has a revenue problem, not a spending problem. And thus a number of Republicans voted for a package that raises $571 million in new recurring revenues to close our budget deficit in this and subsequent years. They recognize that we need new taxes to maintain the level of spending on education, human services, environmental protection, and infrastructure that Pennsylvanians demand, let alone to close the investment deficit in providing services in all those areas. At a time when the Speaker of the House and other Republicans continue to live in a fantasy budget-land in which spending should always be cut and taxes never raised, it is an achievement to have the Republican Senate Majority embrace reality and the need to raise new revenues.

As I write this, the Senate is moving in a somewhat haphazard way to a vote on what has been called a “skinny” repeal of the Affordable Care Act. Not only do we not know exactly what will be included in the skinny repeal, but we, like members of the Senate, are uncertain about the point of passing such a bill.

Skinny Repeal as Trojan Horse

Most observers of the Senate believe that the goal of enacting a skinny repeal bill is simply to keep the process of repealing, or repealing or replacing, the Affordable Care Act alive. If the Senate acts on some health care bill that is an amendment of the AHCA passed by the House, the next step will be a House-Senate Conference Committee, which would write a final bill that attempts to thread the very narrow needle between more moderate and more conservative Republicans in both the House and Senate. The bulk of the work of the committee would, likely, be carried out in private among Republicans only. The bill it produces would go back to the House and Senate where it would receive an up and down vote with no opportunity for amendments.

Mitch McConnell and his Republican allies have one more trick up their sleeves to try to get some health care bill through the Senate. This week they will seek a vote to proceed to debate on the bill passed in the House on the understanding that there will be a process, colloquially known as voterama, in which a series of votes on one or more substitutes to the bill, or amendments, will be introduced. That is, Senators are being asked to proceed to debate without any clear idea what final bill they will eventually vote on.

I will say more about the process in a moment. But first I want to urge you to join the Insure PA / Protect Our Care phone bank to ask people in those states with Senators who are unsure about their position to call those Senators and ask them to vote no. (You can call Senator Toomey, too, but he pretty clearly has decided he cares far more about tax cuts for the rich than health care for Pennsylvanians.)

Marc Stier, Director of the PA Budget and Policy Center, made the following statement on the current state of PA budget negotiations:

"If news reports are accurate, enough members of the House Republican caucus heard the voices of their constituents who contacted them in the last 24 hours to demand new recurring revenues to balance the budget in a responsible way.

In its recent letter to Speaker Mike Turzai, the Marcellus Shale Coalition points (in paragraph three) to the effective tax rate (ETR) on production as a key indicator of whether Pennsylvania should enact a severance tax in addition to the per-well impact fee we already have.

OK, let’s look at that ETR using Independent Fiscal Office (IFO) estimates of the ETR for 2011-16 and IFO estimates of prices and production to project the ETR (using IFO’s method) in 2017 and 2018.*